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deVere CEO: ETF, Lightning, and Halving Drive Recent Bitcoin Rally

After taking a brutal beating throughout much of 2019 thus far, Bitcoin made its largest green one-day candle of the year this past week, providing the market with a much needed relief rally.  Bitcoin’s price rose on Friday over $350 before bouncing off overhead resistance in the cryptocurrency’s current trading range.

CEO of independent financial consultancy firm deVere Group Nigel Green says that the move might be the start of a “considerable Bitcoin surge” stemming from one of three main factors behind this recent rally, but that it is still too soon for investors to begin celebrating.

deVere CEO: History Shows Halving Causes “Considerable Bitcoin Surge”

Following the break of support at $6,000, the crypto market has been deeply entrenched in despair as Bitcoin and other leading cryptocurrencies struggle to find their price bottom. Investors have been burned, and the strain on the industry has caused many companies to begin laying off employees as interest and capital flees the market.

Related Reading | Crypto Analyst Expects Strong BTC Bounce, MACD Signals Bottom

However, Bitcoin’s price woes may be coming to an end, and if history repeats itself, it could lead to a “considerable Bitcoin surge,” according to deVere Group CEO Nigel Green.

Green points to the upcoming “halving” in 2020 – an event that reduces the block reward miners receive for validating transactions by 50% – as a potential catalyst that ends the current crypto bear market.

“The code for mining Bitcoin halves around every four years and the next one is set for May 2020. When the code halves, miners receive 50 per cent fewer coins every few minutes.  History shows that there is typically a considerable Bitcoin surge resulting from halving events,” Green explained.

Litecoin’s halving is due this year, and was the first altcoin to break key resistance and helped to lead the crypto market rally that brought Bitcoin a 10% gain this past Friday, lending credence to Green’s claims. Green, however, says there are two other factors behind Bitcoin’s recent rally.

ETF and Lightning Two Other Key Factors Behind Recent Spike

Green also believes that a recent comments made by SEC commissioner Robert J. Jackson Jr. in which he states a Bitcoin ETF will “eventually” be approved may have given investors renewed confidence in the number 1 crypto by market cap.

Additionally, Green calls attention to recent developments in the second-layer protocol Lighting Network, which he says will “dramatically improve Bitcoin’s well-documented scalability issues, allowing it to move towards mass adoption.” Lightning Network, along with a potential ETF approval and the upcoming halving event are the “three key drivers” behind Bitcoin’s recent rebound, according to deVere.

Related Reading | SEC Commissioner Asks Gov’t to Amend Regulation For Crypto ETF, ICOs

But before investors begin to celebrate the end of the bear market, Green warns that the price was only able to reach the top of the trading range, and that “investors should not be popping champagne corks just yet.”

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NYSE Arca Files Paperwork for Bitwise Bitcoin ETF Approval

New details have surfaced about the bitcoin exchange-traded fund (ETF) proposed by Bitwise and NYSE Arca.

Bitwise Asset Management announced its intention to launch the ETF earlier this month. If approved, it would be the first bitcoin ETF to make it to market in the U.S.

At the time, the company said NYSE Arca would file the 19b-4 rule change proposal in the near future. NYSE Arca indeed filed the form the same day, but it does not appear to be listed on any SEC website, possibly due to the ongoing U.S. government shutdown.

As a result, the document went largely unnoticed, despite being posted on NYSE Arca’s own website. (An SEC spokesperson did not immediately respond to a request for comment.)

When Bitwise first announced the ETF proposal, the company said it differed from previous such efforts because a regulated third-party custodian would store the bitcoins. The company also said it would draw pricing data from a large number of exchanges, including both spot and physically settled futures markets, to calculate the index determining the assets’ value.

The filed proposal elaborates on the methodology, noting, for example, that these prices will be “weighted such that bitcoin prices from exchanges with a greater amount of the trading volume in the prior hour are weighted more heavily than bitcoin prices from exchanges with lesser amounts of volume.”

“The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest,” the proposal says. In previous ETF rejections, the SEC has highlighted concerns about market manipulation.

NYSE Arca’s proposal also touched on concerns about what impact any such manipulation might have on the bitcoin market, stating:

“… given the fungible nature of bitcoin, the Index Provider believes that the potential impact on Index values of individual exchanges experiencing outside attempts to manipulate either reported volume or reported prices is muted by the use of a large number of exchange price and volume inputs.”

While NYSE Arca has filed the proposal, the clock has not yet started for its approval or rejection. Attorney Jake Chervinsky, of law firm Kobre Kim, told CoinDesk that “the SEC’s deadline for deciding an ETF proposal is triggered by publication in the Federal Register.”

“That almost certainly won’t happen until after the government shutdown ends,” he said via email. “According to the SEC’s operations plan, they have discontinued all processing and review of proposed rule changes due to the lapse in appropriations.”

Previous bitcoin ETF proposals have been withdrawn or rejected, with Cboe most recently pulling its joint effort with VanEck and SolidX earlier this week. VanEck CEO Jan van Eck cited the government shutdown as a key reason for this, explaining that the companies were having conversations with the SEC prior to the shutdown, but that these conversations had ceased. However, he said the companies would re-file after the government re-opens.

SEC logo image via Mark Van Scyoc / Shutterstock

NYSEArca-2019-01 by on Scribd


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Bitcoin ETF Approval Chances Down to 10%, Says Legal Expert

Following last week’s delay of the SEC to decide on whether to approve or not the proposed, commodity-backed bitcoin ETF proposal of VanEck and SolidX, legal expert Jake Chervinsky now says that there is a 10 percent chance of its approval. 

‘I Think the ETF is in Trouble’

Jake Chervinsky, a legal expert who correctly predicted that the SEC will delay its final decision on the VanEck/SolidX Bitcoin ETF proposal into February 2019, now believes there’s a 10 percent chance of its approval.

In a series of tweets, he laid our arguments for why the Bitcoin ETF is now in jeopardy. According to him, the most important reason for a potential rejection is market manipulation.

“The SEC had many concerns — enough for 18 multi-part questions,” he explains. The most important question was about market manipulation. The SEC wanted to know if CBOE BZX (the exchange proposing the ETF) had ‘a surveillance-sharing agreement with a regulated market of significant size.’”

Chervinsky believes this is the most important issue because it was the main reason the Winklevoss ETF proposal was rejected in July 2018 by the Commissioners.

It’s noteworthy that Commissioner Hester Peirce formally dissented against the decision, however, outlining that it “contributes to further delay” of the cryptocurrency market’s maturation.

Lack of Jurisdiction

The legal expert also notes, however, that a big problem for the SEC is their lack of jurisdiction. Chervinsky:

The SEC’s problem is that it doesn’t have jurisdiction over crypto exchanges, so it can’t force them to provide the information it needs to identify & prosecute manipulation (like spoofing & wash trading). Also, it can’t tell if the exchanges themselves are committing fraud.

He concludes, largely predicating on the issue of manipulation, that “if the deadline were today, I’d give the ETF a 10% chance of approval.”

It’s important to note, though, that even if the SEC rejects the VanEck/SoldiX Bitcoin ETF, there is always the possibility of an appeal. This means it will have to be revisited by the Commissioners and their current lineup is different than the one which rejected Winklevoss’ ETF proposal earlier this year.

Currently, there are two Republicans (Peirce and Roisman), one Democrat (Jackson) and Chairman Clayton (listed as Independent but appointed by a Republican). According to analyst John Galt, this may give the Bitcoin ETF a better chance this time around. He notes:

When SolidX is decided, Republicans Peirce and Roisman favoring approval puts Chairman Clayton in the opposite position he was in for Winklevoss. If he opposes approval and sides with Jackson — regulatory gridlock. If he sides with his fellow Republicans, we have approval of a physical Bitcoin ETF. This is how I believe SolidX gets approved.

The final deadline for the decision on the VanEck/SolidX Bitcoin ETF is set for February 27, 2019.

What do you think of the commodity-backed VanEck/SolidX bitcoin ETF proposal? Will it get approved? Don’t hesitate to let us know in the comments below!

Images courtesy of Shutterstock

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Is It Over Yet? Bitcoin Falls Under $4000 Hitting 14-Month Low

Bitcoin price fell through $4,000 support to reach a 14 month low not seen since September 2017, losing 30% in the past week alone. 

Bitcoin Must Be Dead Now, Surely

Bitcoin price has taken quite a beating in the past weeks as more people are asking if this time is different and if it will ever recover. 

BTC price 00 has buckled, falling under $4,000 and down to $64 billion market capitalization. The cryptocurrency market as a whole has shed almost 50% or $100 billion in market cap over the past ten days alone.

Meanwhile, a fresh barrage of obituaries has hit the mainstream press headlines, notably: 

  • “Stick a Fork in Bitcoin, It’s Done” – Forbes
  • “Cryptocurrencies are About to Become Worthless” – Independent
  • “Jamie Dimon and Warren Buffett Have the Last Laugh on Bitcoin” – Bloomberg

The Bitcoin price is now sitting at a 14-month low not seen since September 2017 and is down a whopping 30 percent in just the past week.

A Ray of Hope

As Bitcoinist reported this past week, the current downtrend is nothing new for Bitcoin. Known as the ‘honey badger’ of money for good reason, the cryptocurrency has historically recovered from even bigger crashes of as much as 90% in the past. 

Meanwhile, traders are cautiously sitting on the sidelines, as the $3,000 appears to be the next line of defense and a potential bottom. Genesis Capital Trading chief Michael Moro told CNBC on Friday that “You really won’t find [the floor] until you kind of hit the 3K-flat level,” adding:

This is about the fifth or sixth 75 percent-plus drawdown that we’ve seen in the 10-year history of bitcoin. And so if you have that [long-term] lens, I don’t believe institutional investors really ultimately care where the price of bitcoin ends in 2018 simply because they’re looking at things three to five years out.

The current drop has also been predicted, if not expected by some analysts and notable industry figures. Earlier this month, Bitmex CEO Arthur Hayes said BTC price could drop to as low as $2,000, adding that the ‘crypto winter’ could last for another 18 months.

Bitcoin trader and analyst Tone Vays meanwhile has also been bearish throughout the year. Though his recent short-term bullishness now appears to have been premature.

The $3K potential bottom — which was a key resistance level in 2017 — may indeed prove to be significant. Cryptocurrency analyst Murad Mahmudov, for example, has charted one of the more accurate predictions to date. Though it remains to be seen whether the $3K floor hold, Mahmudov sees the market as ‘cyclical’ and expects a possible turnaround sometime in summer 2019.

“The key is to stay calm and relaxed,” he wrote in reaction to the current drop. “Don’t panic. Such is the cyclical nature of life.”

With some key events expected over the next few months, namely the launch of Bakkt and a decision on Bitcoin ETF, all eyes will be on the next key support level of $3,000, though chances of a prolonged ‘crypto winter’ and sideways trading into the summer is very possible if the previous ‘crypto winter’ of 2014-2016 is anything to go by.

Is Bitcoin price going under $3,000 or will that be the bottom? Share your thoughts below!

Images courtesy of Shutterstock, Twitter

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Switzerland Approves First Bitcoin-Cryptocurrency ETF with Ticker $HODL

The Bitcoin ETF $HODL, offered by Amun Crypto, will begin trading on Switzerland’s Six Swiss Exchange beginning next week. The ETF’s earnings will be linked to five different cryptocurrencies.

The ETF is being offered by Amun Crypto, a U.K. based fintech company. It will begin trading on Six Swiss Exchange next week. Six is Switzerland’s chief stock exchange, as well as the fourth largest in Europe.

According to the Financial Times, the ETF “[…] has been designed to track an index based on the movements of five leading cryptocurrencies.”

Roughly half (48%) of the ETF’s assets will be invested in Bitcoin (BTC) 00. The rest will be put towards bitcoin cash, XRP (30%), ethereum, and litecoin.

New Kid On the Block

Financial Times‘ writer Matt Flood notes that the ETF has been crafted in close accordance with the standards expected from traditional exchange-traded funds. This is according Hany Rashwan, Amun’s top executive.

Rashwan describes the aims of the ETF:

The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments

The Times reports that while competitors like CoinShares and Grayscale exist, they differ in legal form, whilst only being linked to one cryptocurrency. Seeding for the ETF will be fostered by Jane Street and Flow Traders, and it will trade using the ticker $HODL.

The Financial Times highlights the ETF’s arrival amid the lowest drop in BTC price 00 in over a year. The ETF is has been particularly the source of much hype in the cryptocurrency space. An exchange-traded fund product is expected to facilitate institutional buying of bitcoin.

Switzerland seems to be perpetually fixed in the crypto news cycle whether its happenings in Crypto Valley or the present ETF. Progress seems to abound.

In October, Bitcoinist reported on Crypto AG’s recently-granted cryptocurrency asset management license. A month earlier, Bitcoinist also wrote on Switzerland’s status as a top global Bitcoin destination.

What are your thoughts on the Bitcoin ETF $HODL? Share your thoughts below!

Images and media courtesy of Shutterstock, Twitter (@boscryptocnn, @MANT121266), YouTube (ThinkCrypto).